Microsoft’s Bid for FAST Could Lead to Ad Deals

While Microsoft would obtain Fast’s search technology, the deal would potentially bring another benefit: Microsoft stands to extend its search advertising publisher network.

Fast specializes in technology to assist enterprises with searching for internal information; it also has a pay-per-click advertising platform, and other features. Microsoft, for its part, is one of the top search engines, though it lags behind Google and Yahoo.

In announcing the bid, Jeff Raikes, president of the Microsoft Business Division, touted Fast’s search technology but declined to expand on what Web search efforts the companies will focus on.

“We were excited about the great team, the great expertise that [Fast CEO] John Lervik, and Fast R&D [research and development] have. There were discussions along the lines of where there is relevance to the work they are doing in the Web search area, but we don’t have anything to announce at this time,” Raikes said.

As a vendor that provides search technology to numerous publishers including TV Guide Online, ThomasNet.com, YellowPages.com, Virgilio, “Washington Post,” “Financial Times,” and others, at least one analyst said the Fast acquisition bid could potentially help Microsoft extend its ad network.

“Going into this business-to-business enterprise search segment in a bigger way is the primary motivation,” said Greg Sterling, an analyst with Sterling Market Intelligence. But Fast’s customer relationships may be just as valuable. “Microsoft clearly wants to build out its ad network. It may be one of the secondary benefits of the package. These are the Fast clients and relationships, and that might be an entree for Microsoft to bring those folks into the fold as ad network partners. That’s a possibility.”

By starting off the new year with a bid for Fast, Microsoft is also showing its commitment to CEO Steve Ballmer’s plan to continue its mergers and acquisition strategy despite fears of a slowing economy, Sterling said.

“It signals Microsoft’s willingness to spend considerable sums of money to go and expand its reach, to bring strategic assets on board,” he said. “It may not be about advertising per se, but it indicates the intention of Microsoft to keep acquiring companies it views as strategic.”

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